Are you confused by what the difference is between a Home Owners’ Association, Resident’s Association or a Community Association? You aren’t alone.
In Calgary we use the term HOA (Home Owners’ Association) and RA (Residents’ Association) almost interchangeably as both maintain green spaces and amenities established by a developer, have a volunteer board of directors and operate under the registered by-laws of a non-profit organization.
Often in Calgary we identify HOA for non-profits that mange the beautification of pathways and entrances in communities, while RAs manage a community "building" or "feature" amenity (i.e. lake or water park).
The board of each HOA/RAs sets the fees annually. The fees can range from as little as $50 to about $880 (lake community) per year. These fees are mandatory so 100% of the homeowners have to participate or legal action is taken against non-compliant homeowners. Homeowners who fail to pay their HOA/RAs fees can be sued. Some also charge credit card rate interest fees (18%+) putting a homeowner experiencing hard times in a very difficult position.
Interestingly, there is no master list of how many RAs or HOAs there are in Calgary. Nobody seems to know what the first one even was, but the best guess is Lake Bonavista in 1967.
Community Associations (CAs) differ from HOA/RAs in that they have no mandatory fees or membership. They may or may not operate a building, but they do manage various year-round community activities and programs. They too have a volunteer Board of Directors and most of their activities are managed by volunteers. There are over 200 Community Associations in Calgary, with the Federation of Calgary Communities (FCC) providing support.
I checked with Leslie Evans, Executive Director of the FCC to get more insights on how HOAs, RAs and CAs work - or don’t work - in Calgary.
Q: Does an HOA create a two-tiered community system in Calgary?
A: It depends! Sometimes the developer creates an HOA for a specific piece of land, while others might create an HOA/RA for an entire community they are building, whose boundaries might or might not align with the City’s community association boundary. This causes confusion and can result in frustrations between HOA/RA and CAs.
When the relationship between the HOA/RA and CA is good, you have the best of both worlds. The HOA/RA's amenities combined with the CA's ability to provide social, recreational and educational activities creates a vibrant community.
However, the relationship is sometimes strained, or can vary year-to-year with changing board volunteers on both side. It is most often strained because the HOA/RA is a "have organization" with funds and an amenity while the CA is often perceived as a "have not organization" with only a volunteer membership. So, yes sometimes HOAs/RAs can create a two-tiered community.
For example, in Tuscany, the developer for Tuscarora (a small sub-section of Tuscany) did not wish to contribute to the Tuscany HOA/RA so the homeowners of Tuscarora were not allowed access to the Tuscany community building or waterpark. However, new home buyers didn’t realize this and it became a huge source of controversy. So, Tuscany’s HOA/RA board decided if Tuscarora residents wanted to belong they could, however, they would have to pay a premium fee and have (at their expense) a caveat added to their land title forever committing that home to be a member of the Tuscany HOA/RA. This definitely creates a “have” and “have not” situation.
Q: How are renters affected by HOA/RAs?
A: When renters rent in HOA/RA communities they may or may not have access to the HOA amenities. Some have policies that restrict use to the "homeowner." Some "homeowners" don't provide their key to the renter so they have no access to community amenities that their neighbours have. HOAs, in many ways, are private homeowner clubs.
Q: What are the good things about an HOA/RA?
A: HOA/RA amenities are in place when residents "buy" so the water park, lake or hall can be enjoyed as soon as they move in. HOAs are financially sustainable assuming the board manages it well, as have a steady source of revenue to carry out the mandate.
On the other hand, Community Association buildings often take decades to build because residents have to fundraise for the building, negotiate land from the City and struggle to operate the building with no mandatory fees.
HOA/RAs are usually heavily supported by the developer until build out – allowing time for volunteer boards to learn what their role is. In addition, the funds usually cover a paid staff person or two which really adds continuity to the organization.
As well, HOA/RA’s amenities are built on private land; this means there is still another 10% of the development allocated to parks, schools and a CA site within the community.
HOA amenities are not "gifts" from the developer. Rather, they are mortgaged amenities to the HOA homeowners i.e. homeowners pay for the entire development, maintenance and life cycle of these amenities through the annual fee system.
Q: What are the not-so-good things about an HOA/RAs?
A: They are confusing. Multiple HOA/RAs within the same CA causes mass confusion. Developers don't always work together especially when multiple landowners develop the land side-by-side.
For example, in West Springs/Cougar Ridge, there is one CA with but more than 25 HOAs. There are 25 boards all trying to enhance the entranceways and green spaces, which is an incredible waste of volunteer time that takes away from other possible community building activities.
The volunteers are also potentially paying more for maintenance contracts because they are contracting small jobs without collaborating together. What is worse is the CA has no idea how to contact them to try to collaborate on community building activities. That’s because there is no HOA/RA registry. Lawyers doing individual homeowner title transfers but do not know who to call. They often call the Federation of Calgary Communities because they think we can help, but we can’t. Some lawyers and real estate agents don’t even know the difference between a CA and HOA/RA.
Q: Do all new communities have HOA fees?
A: This is definitely the trend, but not all new communities have HOA fees. It is the developer’s decision. The City likes HOAs because they don’t have to maintain the green spaces and entranceways.
Jason Palacsko, VP of Calgary Communities for Brookfield Residential, one of North America’s largest home builders, agrees with Evans that while HOA/RA can be confusing, they are important in fostering a sense of community and thus why all of Brookfield’s new communities in Calgary have a HOA/RA. He strongly feels “HOA/RAs create places where people play, connect and experience belonging which is important in a world where people are feeling increasingly isolated.”
So, there you have it. I hope this clears up the confusion.
Note: An edited version of this blog was published in the Calgary Herald's on June 16, 2018.